Risk Aversion Index
Risk Aversion Index: Stayed On “Lower-Risk” Signal
Despite the “Lower-Risk” signal, the surge in bond yields and a higher U.S. dollar have materially tightened financial conditions: Caution is strongly recommended.
Risk Aversion Index: Stayed On “Lower-Risk” Signal
The Risk Aversion Index ticked up in August, but its “Lower-Risk” message is unchanged. Within fixed income, we remain constructive on shorter maturity and higher-quality credit.
Risk Aversion Index: Stayed On “Lower-Risk” Signal
The rally in risky assets became even more broad-based, with small caps and EM participating fully.
Risk Aversion Index: New “Lower-Risk” Signal
The risk rally has survived a wide range of challenges, including renewed central bank hawkishness, and tighter credit/bank-lending standards, among others. “Soft landing” is still the key narrative that supports the current rally.
Risk Aversion Index: Stayed On “Higher-Risk” Signal
Despite an AI-fueled equity rally, an imminent liquidity reduction and ongoing bank-credit tightening are serious headwinds for risky assets in the near term.
Risk Aversion Index: Stayed On “Higher-Risk” Signal
Despite the resilience in most risky assets, the recession probability has increased and the prospect of further credit tightening has only added to the downside risk.
Risk Aversion Index: Stayed On “Higher-Risk” Signal
Inflation concerns have been pushed aside by the upcoming curtailment of credit and lending. The possibility of a recession has no doubt increased, and risky assets are apt to face challenges.
Risk Aversion Index: A New “Higher-Risk” Signal
Inflation worries have rekindled expectations for additional rate hikes. Providing this dynamic is still in play, risky assets are apt to face challenges.
Risk Aversion Index: Stayed On “Lower-Risk” Signal
Seasonality is still an advantage, and financial conditions have eased. Within fixed income, we remain favorable toward both Treasuries and higher-quality investment-grade corporate bonds. We maintain a neutral stance on the yield curve.
Risk Aversion Index: Stayed On “Lower-Risk” Signal
While seasonality remains favorable, the risk of a severe recession looms large in the medium term. We are favorable toward high-quality corporate credit and Treasuries.
Risk Aversion Index: Stayed On “Lower-Risk” Signal
The market has responded quickly to global central-bank pivots, and favorable seasonality can carry the rally a bit further in the near term. However, the risk for a severe recession still looms in the medium term.
Risk Aversion Index: A New “Lower-Risk” Signal
Given depressed market sentiment and favorable seasonality, near-term prospects look better for risky assets.
Risk Aversion Index: Stayed On “Higher-Risk” Signal
The risk of a policy error is the top concern as the Fed doubles the pace of Quantitative Tightening, even with the U.S. technically in a recession. Caution is recommended.
Risk Aversion Index: Stayed On “Higher-Risk” Signal
The risk of a policy error is extremely high as the Fed stays on an aggressive tightening path even with the U.S. in a “technical” recession. Caution is recommended.
Risk Aversion Index: Stayed On “Higher-Risk” Signal
The risk of a policy error is elevated as the Fed stays on an aggressive tightening path even though growth materially slows. Caution is recommended.
Risk Aversion Index: Stayed On “Higher-Risk” Signal
While inflation might have peaked, a material slowdown looks more certain as the Fed stays on an aggressive tightening path. Caution is warranted.
Risk Aversion Index: A New “Higher-Risk” Signal
As long as the Fed stays on the current aggressive tightening path, caution is highly recommended.
Risk Aversion Index: Stayed On “Lower-Risk” Signal
With the Fed still on a tightening path, caution is still recommended. Among fixed income, we remain neutral on TIPS but have turned favorable toward EM bonds.
Risk Aversion Index: A New “Lower-Risk” Signal
Despite continued weakness in equities and a higher reading in our Risk Aversion Index (RAI), it generated a “Lower-Risk” signal.
Risk Aversion Index: Stayed On “Higher Risk” Signal
Lofty valuations amid shrinking liquidity conditions make all risky assets vulnerable.
Perception for the Professional
March 2026 Issue
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March 2026 Issue
